Updated: Aug 31, 2022
The new Customs Declaration Service (CDS) system is the result of years of development by HM Revenue and Customs (HMRC) to replace the Customs Handling of Import and Export Freight (CHIEF) system. The transition period began in August 2018 and is scheduled to last through to March 2023.
HMRC plans to cut back on CHIEF services gradually. In two stages, the functionalities will be turned off: You will no longer be able to make new import or export declarations through CHIEF.
● CHIEF Import process will stop on 30th of September 2022.
● CHIEF Export process will stop on 31st of March 2023.
So you will no longer be able to submit new export declarations using CHIEF after the above dates.
When the UK exited the European Union (EU), the new CDS system was supposed to take over as the only system in use. Still, it was not equipped to manage the anticipated substantial increase in customs declarations. Instead, the government concentrated on modernising CHIEF and enhancing its functionality.
Rather than suddenly shutting down CHIEF, HMRC adopted a dual strategy, requiring traders to utilise CHIEF for customs declarations relating to imports into Great Britain and CDS for those pertaining to Northern Ireland until CDS was scaled to be able to manage the high volume of customs declarations.
What Was CHIEF (Customs Handling of Import and Export Freight)
CHIEF was an effective system for following all import and export processes. The Customs Handling of Import and Export Freight (CHIEF) system tracks the flow of products by land, air, and sea. It enabled importers, exporters, and freight forwarders to finish customs procedures electronically and automatically verify data entry for errors.
CHIEF was linked to five Community System Providers (CSPs), independent trading systems serving hundreds of ports, airports, transit hangars, and freight forwarders to record and monitor movements at all customs points, including ports and airports.
As a component of the risk assessment process used by HM Revenue & Customs (HMRC), CHIEF also determined which shipments or items within a shipment require physical inspection or paperwork review. This expedites the transit of legal goods and those assessed to pose a low level of risk when they are immediately exported from or imported into the UK.
CHIEF To CDS Road Map
Contrary to popular belief, the idea of making changes in the CHIEF system was not just about leaving the EU. The UK has a series of projects to modernise the customs system and integrate it with the rest of the world. Initially, the plan was to upgrade CHIEF and increase its functionality. However, focusing on upgrading CHIEF has resulted in more cost and time.
The CDS schedule was that the UK's transition to CDS was scheduled to be completed in 2021. As CDS complies with the Unified Customs Code, it would be the default system utilised for Northern Ireland. In the UK, on the other hand, it has been much slower to test and increase in user numbers. The main problem was that merchants could not obtain the appropriate software to connect to CDS. Developers did not have enough time to create, test, and deliver software to their customers.
As a result, Autumn 2022 has been determined as the definitive transition date to CDS for importers and Spring 2023 for exporters. Setting a deadline for exporters and importers to abandon CHIEF and work solely on CDS has been decided as the best way to avoid prolonging the process.
Technical Specifications for CHIEF and CDS
With dedicated high-speed communications links to the CSPs and customs offices across the UK, CHIEF provides both Human Computer Interface and DTI EDI interfaces. CDS provides a more sophisticated customs system. In terms of interaction with several trading partners, particularly the EU, the UK's customs clearance will be quicker and more efficient with CDS.
CHIEF had a robust security framework in place to guard against illegal access and maintain efficient business continuity. Security and a more adaptable software infrastructure are both features of CDS.
For commercial users, the CHIEF system offered comprehensive user guides and documentation. Because CDS is a more digital platform, consumers may carry out all transactions through a single interface.
Trade Tariff and Union Customs Code
The UK Trade Tariff, which contains the categorization information for all commodities and any potential particular circumstances, is a crucial step in the export declaration process. Exit Summary Declaration (EXS) information from before departure is integrated with fiscal data elements in a customs declaration on CHIEF. This will still be the same process with CDS.
The method for preparing export declarations and most of the methods for entering information will be the same as for CHIEF. But there are different points. An important part of the fundamental change ensures Union Customs Code compliance.
The tariff classification stage will be the most accurate method for traders to obtain information from the customs broker and their customers abroad. It is crucial for importing companies to request the tariff codes of the products to be imported from their foreign suppliers so that there is no error later in the process.
The Seven Steps To CDS Success
You can take seven actions below to get ready to use the Customs Declaration Service (CDS). Don’t forget you can always contact our friendly and helpful team of experts to assist you with the transition to CDS.
1. Create an account with Government Gateway.
For access to their personal or corporate tax account, most businesses already have a Government Gateway account. You must log in with this account to access the Customs Declaration Service.
2. Apply for a Registration and Identification number for an Economic Operator.
You require a GB-based Economic Operator Registration and Identification (EORI) number. Most companies that import and export goods from the UK already have one. You can apply for one if you don't already have an EORI number. The application process only takes ten minutes and is free. Within a week, you should have your EORI number.
3. Create a Customs Declaration Service account.
After that, you must sign up for the Customs Declaration Service. It can take up to five business days. Please visit www.gov.uk/hmrc/cds-get-access. You'll need your Government Gateway user ID and password for yourself or your company.
The following information is also required: your GB EORI number; your 10-digit Unique Tax Reference (UTR) number, which can be found on any HMRC payment reminders or in your tax account; the address for your company that we hold in our customs records if your address has changed; your National Insurance number (if you're an individual or sole trader); and the date your business was established.
4. Give your software provider permission to make statements
in your name.
By doing so, your software and Government Gateway account will be connected. You'll learn how to do this from your software provider.
You may need to authorise the software for each client if you are acting on their behalf. The authorization is something that your software provider can assist you with. This authorization may need to be periodically updated with your provider.
5. Check the instructions.
The Community Customs Code, on which CHIEF is based, and the Union Customs Code, on which the Customs Declaration Service is based, are different. The main distinctions between CHIEF and the Customs Declaration Service can be read about in more detail here - www.gov.uk/hmrc/cds-communication-pack.
6. Select the payment method you want to use.
The best payment option for your declaration is yours to select. The Customs Declaration Service Financial Dashboard allows you to give and modify standing authorities for your payment accounts as well as view your balances and payments.
The principal payment options available to you are:
• The Customs Declaration Service uses a different HMRC for its duty deferment account. Visit: https://www.gov.uk/hmrc/cds-setup-dda
• delayed the VAT accounting. On your VAT return, including import VAT. Visit: www.gov.uk/hmrc/import-vat for more information.
7. Obtain access to Trader Dress Rehearsal.
You can test out declaring and check for mistakes with the Trader Dress Rehearsal service. Trader Dress Rehearsal service might give you more self-assurance when you begin using the Customs Declaration Service. Visit: https://www.gov.uk/guidance/using-the-trader-dress-rehearsal-service.
Finally, when UK exporters and importers are ready to declare in the Customs Declaration Service, they will contact their software providers and request access to the live service. In other words, they will be able to get CDS access authorization from their computers and start using the system.
Here at Just Trade, we aim to make the transition to CDS as easy and stress-free as possible. Our intuitive software will help you streamline your processes as well as saving you time and money.
Our popular Tate’s International Trade Guide is also available which covers the rules for documentation and procedures involved in exporting to all 193 countries of the world.